Honduras

Member Organizations

Member Organization Associate Other PAOs

  Colegio de Peritos Mercantiles y Contadores Públicos

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The corporate financial reporting framework in Honduras is established under the Commercial Code of 1950, as amended, and the Accounting and Auditing (A&A) Law No. 189 of 2004. The Code requires companies to keep accounting records and sets some requirements relating to the preparation of financial statements.

    The Code requires corporations (sociedad anónima) to appoint a comisario with broad oversight responsibilities. The comisario combines some characteristics of an internal auditor, external auditor, and an audit committee in one individual.

    The A&A Law requires all entities to prepare annual financial statements and establishes the Accounting and Auditing Standards Technical Board (JUNTEC) as the national standard-setter for accounting and auditing. In 2008, the JUNTEC issued Resolution No. 2/2008, which adopted ISA (it appears that the 2008 ISA were adopted at the time) for all mandatory audits, and in 2010, the Board issued Resolution 001/2010 requiring the application of IFRS and IFRS for Small-and Medium-sized Entities.

    Banks, insurance companies, and other financial institutions are regulated by the National Banking and Insurance Commission (CNBS) in accordance the CNBS Law of 1995. There are no listed companies in Honduras. Regulated entities are required to prepare annual audited financial statements in accordance with the accounting and auditing standards as established by the CNBS. The CNBS has adopted IFRS by the Circular No. 068 of 2014, effective 2016. Statutory audits must be conducted in accordance with ISA and by auditors or audit firms registered with the CNBS.

  • Regulation of Accountancy Profession

    The accounting profession in Honduras in self-regulated through the membership requirements of the professional accountancy organization (PAO). Under the Decree No. 73 of 1962, professional associations are authorized to regulate their respective fields of activity. The decree mandates mandatory membership within a professional association in order to practice a profession. Professional accountants are therefore required to join a PAO. The only requirement to apply for membership with either of the two PAOs is to have completed the relevant academic education.

    In Honduras, there are two types of qualifications of accounting professionals: Public Accountants (contador publico), which are individuals who have obtained a university degree in accounting, and Accounting Technicians (perito mercantiles), who only need to have a secondary education. Public Accountants primarily offer accounting and auditing services while Accounting Technicians provide bookkeeping and other services, and are also authorized to perform independent audits of financial statements. There are no examination, practical experience, or continuing professional development (CPD) requirements in order to offer these services.

    In Honduras, there are two PAOs: the Colegio de Peritos Mercantiles y Contadores Publicos de Honduras (CPMCPH) established by Decree No. 74 of 1966, as amended by Decree No. 71 of 2004, and the Colegio Hondureño de Profesionales Universitarios en Contaduría Pública (COHPUCP) established by Decree No. 19 of 1993. The CPMCPH is composed of Accounting Technicians and Public Accountants. The COHPUCP is comprised of solely Public Accountants. The only requirement to apply for membership with either of the two PAOs is to have completed the relevant academic education.

    In accordance with the laws that established the PAOs, both institutes are empowered to maintain registries of Accounting Technicians, Public Accountants and firms, and set ethical standards as well as investigative and disciplinary procedures for its members. Both PAOs also offer voluntary CPD training for members; however, based on their respective founding legislation, the PAOs do not have sufficient legal powers to oblige its members to fulfill a CPD requirement.

    In addition, auditors providing services to the National Banking and Insurance Commission (CNBS) are subject to its regulation. The CNBS, in accordance with the Resolution No. 392/2011 and Circular No. 075/2011, has established a registration system to ensure that auditors providing services to banks and insurance companies. The CNBS requires a minimum level of qualifications, membership in one of the two PAOs in the jurisdiction, and basic training requirements. The CNBS also mandates audit firms to establish quality control mechanisms and conduct reviews of auditors who provide services to entities under its supervision.

  • Audit Oversight Arrangements

    There are no independent audit oversight arrangements in Honduras. Professionals offering auditing services—Public Accountants (contador publico) and Accounting Technicians (perito mercantiles)—are required to join a professional accountancy organization (PAO) and are then regulated through the membership requirements of the PAO.

    In Honduras, there are two PAOs: the Colegio de Peritos Mercantiles y Contadores Publicos de Honduras, composed of Accounting Technicians and Public Accountants, and the Colegio Hondureño de Profesionales Universitarios en Contaduría Pública, comprised of solely Public Accountants. The only requirement to apply for membership with either of the two PAOs is to have completed the relevant academic education.

    In accordance with the laws that established the PAOs, both institutes are empowered to maintain registries of Accounting Technicians, Public Accountants and firms, and set ethical standards as well as investigative and disciplinary procedures for its members. Both PAOs offer continuing professional development (CPD) training for members; however, based on their respective founding legislation, the PAOs do not have sufficient legal powers to oblige its members to fulfill a CPD requirement.

    In addition, auditors providing services to the National Banking and Insurance Commission (CNBS) are subject to its regulation. The CNBS, In accordance with the Resolution No. 392/2011 and Circular No. 075/2011, the CNBS has established a registration system to ensure that auditors providing services to banks and insurance companies. The CNBS requires a minimum level of qualifications, membership in one of the two PAOs in the jurisdiction, and basic training requirements. The CNBS also mandates audit firms to establish quality control mechanisms and conduct reviews of auditors who provide services to entities under its supervision.

  • Professional Accountancy Organizations

    Asociación de Firmas Auditoras de Honduras (AFA)

    The AFA was founded in August 2008. It membership includes only audit firms. The AFA focuses its efforts on providing training activities, particularly related to quality control.

    Colegio de Peritos Mercantiles y Contadores Públicos de Honduras (CPMCPH)

    The CPMCPH was established by Decree No. 74 of 1966, as amended by Decree No. 71 of 2004. Under the law, the CPMCPH is responsible for representing and promoting the profession of Accounting Technicians and Public Accountants in Honduras to the government, regulators, and universities; establishing ethical requirements; setting investigative and disciplinary procedures; providing training programs for its members; and supporting the adoption of international standards and the regulation of the profession through its participation on the Accounting and Auditing Standards Technical Board (JUNTEC).

    In addition to being a member of IFAC, the CPMCPH is a member of the Inter-American Association of Accountants.

    Colegio Hondureño de Profesionales Universitarios en Contaduría Pública (COHPUCP)

    The COHPUCP was established by Decree No. 19 of 1993. The COHPUCP represents Public Accountants to the government, regulators, and universities; sets ethical standards and I&D procedures for its members; and conducts trainings for its members. COHPUCP also participates in the standard-setting process through its representation in JUNTEC.

  • Projects or Other Information

    The World Bank undertook a project in 2008 to strengthen the accounting and auditing profession in Honduras through its Financial Sector Reform and Strengthening (FIRST) Initiative. The project aimed to support the implementation of the recommendations of the Reports on the Observance of Standards and Codes–Accounting and Auditing report for Honduras, with a focus on: (a) building the capacity of the technical board and strengthening the Honduran accounting profession; (b) updating and consolidating the legal and regulatory framework pertaining to corporate sector accounting and auditing; (c) strengthening the financial sector stability; and (d) strengthening accountability and corporate governance in state-owned enterprises.

    From 2004 to 2008, the Multilateral Investment Fund of the Inter-American Development Bank implemented a technical assistance project with the objectives of adopting and implementing IFRS and ISA, strengthening accounting education and training, and introducing of a quality control program in Honduras.

Adoption of International Standards

  • Quality Assurance

    The Accounting and Auditing Standards Technical Board (JUNTEC) under the Accounting and Auditing Law of 2004 is responsible for the implementation of a QA system. However, as of 2017, such a system has not been established.

    All professional accountants offering auditing services are required to join a professional accountancy organization (PAO). Out of the two PAOs, only the Colegio Hondureño de Profesionales Universitarios en Contaduría Pública (COHPUCP) has introduced a voluntary QA review system for its members. The extent of compliance of its requirements with those of SMO 1 is not clear.

    JUNTEC has monitored the COHPUCP’s voluntary QA system and is expected to issue a resolution that would require the adoption of ISQC 1 by all auditors and recognize the COHPUCP’s QA system by 2019.

    In addition, the National Banking and Insurance Commission requires audit firms to establish quality control mechanisms, in accordance the Resolution No. 392/2011 and Circular No. 075/2011.

    Current Status: Not Adopted

  • International Education Standards

    In accordance with Article No. 175 of the Honduran Constitution, Public Accountants are required to have a university degree in accounting to practice the profession while Accounting Technicians are required to have a secondary education. The Ministry of Education and universities control the curriculum and qualifications of Accounting Technicians and Public Accountants, which are not aligned with IES requirements.

    No professional examination or practical experience is required in order to begin offering accountancy services. Additionally, while professionals must join a professional accountancy organization (PAO), the two PAOs in the jurisdiction are not legally empowered to set continuing professional development requirements.

    The National Banking and Insurance Commission has established practical experience, minimum level of qualifications and basic training requirements for auditors of regulated companies; however, these requirements are not in line with those of the IES.

    Although some of the requirements of IES appear to have been incorporated into the national requirements, such as some initial educational and practical experience requirements for auditors providing services to regulated companies, it is does not appear that any other national requirements exist that incorporate the IES.

    Current Status: Partially Adopted

  • International Standards on Auditing

    The Accounting and Auditing Law No. 189 of 2004 empowers the Accounting and Auditing Standards Technical Board (JUNTEC) to set auditing standards. JUNTEC has adopted ISA as published in the Official Gazette through the Resolution No. 2, 2008. It appears that the 2008 ISA were adopted at the time.

    The Colegio de Peritos Mercantiles y Contadores Públicos de Honduras reports that the JUNTEC does not have procedures to adopt the latest ISA and issue translations of the changes on an ongoing basis.

    The National Banking and Insurance Commission (CNBS) Law of 1995 authorizes the CNBS to set auditing standards for regulated entities under its supervision. CNBS has adopted ISA through the Circular No. 075/2011; however, the version that was adopted is unclear.

    Current Status: Not Adopted

  • Code of Ethics for Professional Accountants

    Decree No. 73 of 1962 stipulates that all professional accountants must belong to a professional association in order to practice. In Honduras, there are two professional accountancy organizations—the Colegio de Peritos Mercantiles y Contadores Publicos de Honduras (CPMCPH) and the Colegio Hondureño de Profesionales Universitarios en Contaduría Pública (COHPUCP)—and they have both set ethical requirements for their members.

    The Decree No. 74 of 1966, as amended by Decree No. 71 of 2004, grants the CPMCPH authority to set ethical standards for its members. The CPMCPH issued a Code of Ethics in 2005, which is not aligned with the IESBA Code of Ethics.

    The COHPUCP, empowered by the Decree No. 19 of 1993, has adopted the IESBA Code of Ethics for its members in 2011; however, it is not clear what version of the IESBA Code of Ethics has been adopted and is being applied by COHPUCP’s members.

    Current Status: Not Adopted

  • International Public Sector Accounting Standards

    The General Accounting Office (CGR), within the Financial Secretary of Honduras (SEFIN), sets public sector accounting standards in accordance the Budget Organic Decree No. 83 of 2004.

    In 2012, due to legal provision in the Accounting and Auditing Law No. 189 of 2004, the SEFIN worked with the Accounting and Auditing Standards Technical Board (JUNTEC) in order to adopt IPSAS in the jurisdiction. Subsequently, the JUNTEC adopted 2013 IPSAS for all public sector companies, as published in the Official Gazette through the Resolution No. 60 of 2014. The Resolution was reaffirmed by the CGR and SEFIN Resolution No. 223 of 2015.

    Current Status: Adopted

  • Investigation and Discipline

    Decree No. 73 of 1962 stipulates that all professional accountants must belong to a professional association in order to practice publicly. In Honduras, there are two professional accountancy organizations—the Colegio de Peritos Mercantiles y Contadores Publicos de Honduras (CPMCPH) and the Colegio Hondureño de Profesionales Universitarios en Contaduría Pública (COHPUCP)—and they have both established investigative and disciplinary (I&D) procedures for their members.

    In accordance with the Decree No. 74 of 1966, as amended by Decree No. 71 of 2004, the CPMCPH is responsible for the I&D proceedings of its members. The CPMCPH has created a Court of Honor as an I&D system for its members. The institute reports that its I&D system is not fully in line with the SMO 6 requirements.

    The COHPUCP, empowered by the Decree No 19 of 1993, is responsible for the I&D of its members and has an I&D system in place. The extent of fulfillment of the COHPUCP’s I&D with the requirements of the SMO 6 is unclear.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The Accounting and Auditing Standards Technical Board (JUNTEC) is responsible for setting accounting standards in accordance the Accounting and Auditing Law No. 189 of 2004.

    JUNTEC adopted IFRS and IFRS for Small-and Medium-sized Entities through the Resolution No. 001 of 2010, and subsequently published the standards in the official gazette, for application by all entities other than banks and financial institutions.

    The Colegio de Peritos Mercantiles y Contadores Públicos de Honduras reports that the JUNTEC does not have procedures to adopt the latest IFRS and issue translations of the changes on an ongoing basis.

    The National Banking and Insurance Commission has adopted IFRS by the Circular No. 068 of 2014 for all regulated companies under its supervision, including banks and other financial institutions, effective 2016; however, the version that was adopted is unclear.

    Current Status: Partially Adopted

Disclaimer

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Methodology

Methodology
Last updated: 10/2017
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